An estate planning attorney passed me this article on New York Times. For people who know about this stuff, how do I know if I really need this coverage before I am talked into it by a salesperson? I'm middle class but don't consider myself wealthy.
Umbrella policies really exist for peace of mind irrespective of how wealthy you are imho. If you're happy with the coverage your home owner's and / or car insurance offers and / or happy with the odds of an event occurring that would hold you liable for (significantly) more than the amount you're covered for, you don't need it. If on the other hand the "what if" keeps you awake at night, you probably do need it. I don't drive often, and rent, so am not terribly exposed and do not currently have an umbrella policy. If I did own a car and a house I probably would take one out.
If you have assets (home equity, 401k), you want coverage for those assets, especially given the low cost of umbrella liability policies. Otherwise, there are all sorts of crappy ways that you can be separated from your property.
If you rent and have a pension managed by someone else, it probably doesn't matter so much.